Los Angeles Jet Fuel Rises to Three-Week High as BP Repairs Unit

By Lynn Doan -
Apr 4, 2013

Spot jet fuel in Los Angeles gained
to the highest level against futures in more than three weeks as
BP Plc (BP/) performed maintenance on a jet fuel hydrotreater at the
Carson oil refinery, the second-largest in California.

The 266,000-barrel-a-day Carson plant was scheduled to shut
the treater for planned repairs beginning April 1, a person with
direct knowledge of the schedule said March 28. The work is
expected to last until at least April 8, a person familiar with
operations at the refinery said today.

Jet fuel in Los Angeles strengthened 1.25 cents against
ultra-low-sulfur diesel futures traded on the New York
Mercantile Exchange to a premium of 5.75 cents a gallon at 2:13
p.m. East Coast time, data compiled by Bloomberg show. That’s
the highest level for the fuel since March 11.

The Carson refinery plans to flare gases from April 8
through April 15, London-based BP said in a notice to the South
Coast Air Quality Management District. The flaring isn’t related
to a breakdown, the filing shows.

Jet fuel production in California slipped 0.2 percent in
the seven days ended March 29 to 1.66 million barrels, a six-
week low, according to data posted on the state Energy
Commission’s website late yesterday.

California-blend gasoline, or Carbob, in Los Angeles
weakened 1.25 cents versus gasoline futures traded on the New
York Mercantile Exchange to a premium of 4.5 cents a gallon. The
same fuel in San Francisco climbed 0.5 cent against futures to a
premium of 8.5 cents a gallon.

San Francisco

The premium for Carbob in San Francisco versus the fuel in
Los Angeles climbed a second day, gaining 1.75 cents to 4 cents
a gallon. Last week, San Francisco climbed to the highest level
against Los Angeles in seven months.

California-blend, or CARB, diesel in San Francisco fell by
0.5 cent against ULSD futures to a premium of 13.5 cents a
gallon. The same fuel in Los Angeles dropped 1 cent to 5.5 cents
a gallon below futures.

In Portland, Oregon, low-sulfur diesel also weakened, by
0.5 cent to a 14.5-cent premium versus ULSD futures. Gasoline
there was unchanged at a discount of 5.5 cents to Nymex futures.

The 3-2-1 crack spread of Alaska North Slope crude, Carbob
in Los Angeles and CARB diesel in Los Angeles dropped for the
third straight day, losing $1.26 to $18.53 a barrel at 2:21 p.m.
New York time, the lowest level in more than a week. The spread,
a measure of refining profitability, hit a one-year low of $3.86
a barrel in December.